Pivot points are calculated from previous-period prices, and are used by some traders as a technique to determine resistance and support levels that may signal trade entry/exit points.

FXTrade plots five pivot trend lines: the pivot, two resistance and two support levels. These lines are calculated from the previous time frame (for example, for the previous 5 seconds on the 5-second chart; for the previous day on the 1-day chart). For more information on how pivot points are calculated, see the section below (Pivot Point Calculations).

(To view a pivot point overlay, select Pivot Points from the Add Study menu, then click the + sign. For details, see Overlays.)

To add pivot point trend lines:

1. Maximize the FXTrade or FXGame window so you can see all the controls and have enough working space.
2. Important! Typically, you'll want to calculate trend lines from the previous day's data to track intraday trends. Adjust the time period to 1 day to get this calculation.
   
   
   
   
3. Click on the Advanced Trendline icon and select Pivot Points from the list:
   
   
   
   
4. Click on the period for which you want to draw the pivot lines (typically, the current period so pivot points will be based on the most recent data). Drag the pivot point lines over the time period you want, then click again to finish drawing the pivot point lines.
   
   
   
   
5. Return to the original time period. Only some of the pivot point lines will be visible. (You would have to zoom out to see all of them.) Because the pivot lines are color-coded, you can use them as a guideline to compare current prices with those of the previous period.
   
   
   
   In the example above, the price is just off of the middle pivot line (the grey line near 1.3320), indicating little movement from the previous day's trend.

How Pivot Points are Calculated

The pivot (middle line) is an average of the high, low, and close of the previous period. For example, if you are viewing a chart with 1-day intervals, the pivot would be the average of yesterday's high, low, and close.

The support levels occur below the pivot, and represent significant thresholds for the price to fall through. The resistance levels occur above the pivot, and represent significant thresholds for the price to break.

The first levels (immediately above and below the pivot point) are calculated as follows:

The second levels out from the first levels are calculated as follows:

Or, S2 = (PIVOT - (R1 - S1) = PIVOT - (( 2 * PIVOT - LOW) - ( 2 * PIVOT - HIGH)) = PIVOT - (HIGH - LOW)

Or, R2 = PIVOT + (R1 - S1) = PIVOT + (( 2 * PIVOT - LOW) -( 2 * PIVOT - HIGH)) = PIVOT + (HIGH - LOW)